Santa Monica Lookout
|Santa Monica City Finances Show Strong Recovery, Officials Report|
By Niki Cervantes
May 21, 2015 -- The City of Santa Monica’s projected revenues for the 2015-16 fiscal year has reached pre-recession levels, showing a strong enough recovery to include hiring nearly 50 new staff members, a report by the City’s top budget official said.
The proposed $564.3 million budget for the fiscal year beginning July 1 is $27.4 million, or 4.6 percent less than that the current fiscal budget. The decrease is tied to a drop in capital spending, according to a budget report that will be presented to the City Council Wednesday.
“Santa Monica’s diversified tax base and geographic location have led to a typical strong recovery from the most recent economic downtown,” said the update by Gigi Decavalles-Hughes, the City’s finance director.
“The City’s economically driven tax sources have recovered significantly to reach or exceed pre-recession levels,” she wrote.
According to the report, the City’s finances are healthy enough to fill the fulltime equivalent of 48.6 positions and four more the following fiscal year, officials said.
The new positions are primarily tied to the arrival later this year of the new Expo Light Rail line, which will include the expansion on the Big Blue Bus Expo Service and an increase in public safety staffing.
The proposed budget also includes staffing to enforce Santa Monica’s ban on short-term rentals and to support the City’s popular bike share program.
Employee pay and benefits make up 59 percent of the proposed overall budget, and 72 percent of the general fund, a 4.8 percent increase over the current revised budget, officials said.
Santa Monica property values have shown strong increases in the last three years, and remain the third-highest in Los Angeles County, according to the report. Assessed values are also expected to increase by 4 percent in 2015-2016 and three percent annually in the immediate future, it said.
Sales tax receipts over the last five years have rebounded after sharply declining during the Great Recession. Tourism continues to be strong and the hotel tax has increased on average by more than 10 percent annually over the last four years, the report said.
Utility taxes are expected to grow annually by about one to two percent over the next five years, it said.
The fiscal picture is different from the one painted in January, when officials thought they might see a deficit of $400,000.
But a combination of fees and various charges, parking revenues and other payments boosted the general fund by about 1 percent, or $4 million, the report said. Its budget for the coming fiscal year now has an anticipated deficit of $4.4 million.
Still, there are big costs the City is left to grapple with, according to the report. One is the finding funding for affordable housing, which all but collapsed when the state shut down all redevelopment agencies, including Santa Monica’s.
The City also has a nearly $385 million unfunded liability in pension debt, which it is trying to pay, in part, by chipping in millions of dollars extra each year.
|copyrightCopyright 1999-2015 surfsantamonica.com. All Rights Reserved.||Disclosures|